Year 2019, Volume 5, Issue 2, Pages 1 - 22 2019-07-31

The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System

Abdulhakim Mohamed Masli [1] , Musa Mangena [2] , Donald Harradine [3]

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This paper aims to explore the role of audit committees (ACs) in the Libyan banking sector (LBS) and to investigate the impact on AC practice of the sector’s recent shift to an Islamic banking system. Little is known about the role of these committees, which were only made compulsory in Libya in 2010.

The findings support agency theory in that they perceived these committees as being responsible for reviewing financial statements, the internal auditing function and the external audit process. However, the perception was that ACs are not currently carrying out these responsibilities effectively; participants perceived ACs as spending too little time reviewing financial statements, rarely challenging weaknesses in the work of internal auditors and seldom following up or supervising the work of external auditors. One explanation for this state of affairs is that ACs in the LBS are primarily designed to create legitimacy outside the organisation rather than to effect radical change within it. The study also found that it is not the application of Islamic law per se that is perceived as having an adverse impact on AC practice in the LBS, but the speed at which this transition is taking place in an already weak banking environment.

This research helps expand our knowledge of current AC practice as a key mechanism of corporate governance (CG) by being the first to investigate how this role is performed in Libyan banks, which are in the early stages of implementing Islamic law. The research is also important because it addresses an information gap in the accounting literature by investigating AC effectiveness in a developing country, a context which is still poorly understood.

Audit committees, Corporate governance, Libyan banking sector, Internal audit, External audit
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Primary Language en
Subjects Management
Journal Section Articles
Authors

Author: Abdulhakim Mohamed Masli (Primary Author)
Institution: Nottingham Trent University
Country: United Kingdom


Author: Musa Mangena
Institution: Essex Business School
Country: United Kingdom


Author: Donald Harradine
Institution: Nottingham Trent University
Country: United Kingdom


Dates

Publication Date: July 31, 2019

Bibtex @research article { ijisef485437, journal = {International Journal of Islamic Economics and Finance Studies}, issn = {2149-8393}, eissn = {2149-8407}, address = {Politik Ekonomik ve Sosyal Araştırmalar Merkezi}, year = {2019}, volume = {5}, pages = {1 - 22}, doi = {10.25272/ijisef.485437}, title = {The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System}, key = {cite}, author = {Masli, Abdulhakim Mohamed and Mangena, Musa and Harradine, Donald} }
APA Masli, A , Mangena, M , Harradine, D . (2019). The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System. International Journal of Islamic Economics and Finance Studies, 5 (2), 1-22. DOI: 10.25272/ijisef.485437
MLA Masli, A , Mangena, M , Harradine, D . "The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System". International Journal of Islamic Economics and Finance Studies 5 (2019): 1-22 <http://dergipark.org.tr/ijisef/issue/47473/485437>
Chicago Masli, A , Mangena, M , Harradine, D . "The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System". International Journal of Islamic Economics and Finance Studies 5 (2019): 1-22
RIS TY - JOUR T1 - The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System AU - Abdulhakim Mohamed Masli , Musa Mangena , Donald Harradine Y1 - 2019 PY - 2019 N1 - doi: 10.25272/ijisef.485437 DO - 10.25272/ijisef.485437 T2 - International Journal of Islamic Economics and Finance Studies JF - Journal JO - JOR SP - 1 EP - 22 VL - 5 IS - 2 SN - 2149-8393-2149-8407 M3 - doi: 10.25272/ijisef.485437 UR - https://doi.org/10.25272/ijisef.485437 Y2 - 2019 ER -
EndNote %0 International Journal of Islamic Economics and Finance Studies The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System %A Abdulhakim Mohamed Masli , Musa Mangena , Donald Harradine %T The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System %D 2019 %J International Journal of Islamic Economics and Finance Studies %P 2149-8393-2149-8407 %V 5 %N 2 %R doi: 10.25272/ijisef.485437 %U 10.25272/ijisef.485437
ISNAD Masli, Abdulhakim Mohamed , Mangena, Musa , Harradine, Donald . "The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System". International Journal of Islamic Economics and Finance Studies 5 / 2 (July 2019): 1-22. https://doi.org/10.25272/ijisef.485437
AMA Masli A , Mangena M , Harradine D . The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System. IJISEF. 2019; 5(2): 1-22.
Vancouver Masli A , Mangena M , Harradine D . The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System. International Journal of Islamic Economics and Finance Studies. 2019; 5(2): 22-1.